The communications regulator and consumer groups have sounded warnings about 4G smartphone bill shock after studies showed users of newer phones could double their data usage compared to 3G.

The new iPhone 5 and the 4G version of the Samsung Galaxy S III are expected to drive a mainstream uptake of 4G, which offers download speeds that are up to four times faster than 3G.

The extra speed will make it much easier to stream music and video, activities that will burn through the average mobile data allowance much quicker.

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The Australian Communications and Media Authority (ACMA) is so worried about the risk of bill shock for 4G users that it sounded a warning this week. The type of 4G network adopted in Australia is known as LTE or Long Term Evolution.

Joint research by Canada's Mobidia Technology and Informa Telecoms and Media revealed LTE networks and devices are stimulating increased data usage, by up to 50 per cent in some cases.

A separate 4G study by mobile intelligence firm Validas found the addition of LTE in a phone could double consumers' use.

In its warning, the Australian authority said: "Users could use more data than they're used to and may experience bill shock as a result."

Changes in the new voluntary telco industry code will mean that from October 27 telcos will have to offer standard pricing information to make it easier for consumers to compare offers from carriers. But requirements for more detailed critical information summaries on plans won't come into effect until March 1 2013.

The Australian Communications Consumer Action Network said that in light of this, people buying the iPhone 5 needed to be careful before signing a two-year contract.

"What we're seeing with the iPhone 5 plans currently on offer is low data inclusions at the lower end of the market, which is happening across all providers as data becomes more expensive," said consumer network spokeswoman Elise Davidson.

"It's tempting for consumers to sign up for a lower monthly price but be warned, if you go over your included allowance, excess data charges are notoriously punitive."

Ms Davidson said disputes between customers and their providers about excess data charges had almost tripled in the past year as customers received unexpected bills running into the thousands.

"On the other end of the scale, some people simply opt for an expensive monthly plan to try to avoid getting stung by excess charges - and [ACMA] research shows that collectively, we spend $1.5 billion more than we need to by being on the wrong plan," said Ms Davidson.

The network advises prospective 4G users to review their use from previous bills before picking a plan. It recommends actively monitoring use through tools provided by carriers but warns these tools are not real-time so estimate your use conservatively.

"Anyone signing up for an iPhone 5 contract on 4G will be able to stream videos and music more readily but keep a close eye on your data usage as it can burn through your allowance and excess data charges are very expensive," said Ms Davidson.

Telstra, which has been providing 4G smartphone services since January, said it had found that the data included on its plans more than met the needs of the "typical consumer".

"Our post-paid mobile customers receive usage alerts when they reach 80 per cent and 100 per cent of their data allowance," a Telstra spokesman said. "iPhone and android customers can also access the Telstra 24x7 app which shows at a glance how much data they've used compared with their allowance."

Heavy users can buy additional data packs with their Telstra plans, for example 1GB for $15 a month.

Optus said its customers received a text message when they've used 50 per cent, 85 per cent and 100 per cent of their included value and data allowances. It also has the My Optus app which allows customers to check their use and recharge their credit.

"We will soon be offering low-cost top-ups to help keep costs under control for those who need to increase their usage and data allowance for the month,'' an Optus spokesman said.

Tips to avoid bill shock

1. Download apps to regularly monitor your data use and spend.2. Learn how much your plan charges for each MB of data and excess use.3. Use wi-fi when it's available, especially at home, for big apps and for video.4. Disable location services, switch email to manual and use mobile websites.5. Turn off data roaming when you're overseas.Source: ACMA

105 comments

Beware. This 4G comes with a sting in the tail. While customers are distracted by the hype of new phones, larger screens and (not so functional) map applications, they arent told in general about the high cost of 4G. Who do you think Telstra, the largest 4G supplier will get to pay for all the advertising. You my friend. Thank you so much for raising this issue - at least with SMH readers ! When 4G becomes reasonable in price, then and only then will I ever sign up. I predict 2014

Commenter

Adam Smith

Location

Sydney

Date and time

September 26, 2012, 6:50AM

I guess it depends what your definition of reasonable is. My iPhone 5 is costing me exactly what my iphone 4 cost me and i get 4g and half a gig extra data... doesn't seem that bad to me. As with all mobile plans watch your usage and you will be fine.

Commenter

typedmillepede

Date and time

September 26, 2012, 10:12AM

I have two apps on my phone, one that measures data usage and another that shuts down the network when the limit is reached. We had two very large excess data bills and after considerable argument the company credited us for them rather than go to local court and after complaints to TIO.

Commenter

MG

Date and time

September 26, 2012, 10:49AM

MG what are the names of these apps?

Commenter

lildiv

Location

Syd

Date and time

September 26, 2012, 11:11AM

@MG, what are the names of those two apps?

Commenter

Maxx

Location

Sydney

Date and time

September 26, 2012, 11:12AM

Welcome to the Coalition's version of how they say people will connect to the net in the future.

NBN + WiFi + connecting to your own account when out of home would do away with the shock.

The biggest shock is people cannot see that becuase they view he future through the prism of political glasses.

But I guess that if you're dumb enough to download apps on the way to work on the bus and then play them, then... why would you see it and what else would you expect when the bill comes?

Commenter

Rubens Camejo

Location

Maroubra

Date and time

September 26, 2012, 11:44AM

Last year I started receiving SMSs from my mobile phone service provider letting me know that I was about to reach my data limit. I checked the cellular data usage on my phone and confirmed that I was nowhere near the 200Mb I was allocated for the month. I contacted the provider to query the usage and was told that the phone automatically downloads updates overnight, in my case I had somehow downloaded 150Mb in the hour between 2am and 3am. Knowing full well that this was BS (before you ask, push notifications were turned off) I asked for an itemised bill so that I could establish which internet sites were being contacted by my phone. I was told this was not possible, offered a free upgrade to 1Gb per month and my data usage miraculously returned to my usual 50Mb per month average. I have no faith in their ability to accurately measure our usage and based on the outcome of the above example, neither have they ! As to global roaming charges for data, this is a well-documented rort and an area that really does justify regulation across the operators globally.

Commenter

Confused of Cammeray

Location

Sydney

Date and time

September 26, 2012, 11:53AM

If you're using Android 4.0 (Ice Cream Sandwich) or 4.1 (Jellybean), your phone should have a mobile data meter/regulator baked into it's software. You can find it under Settings > Data Usage > Set Mobile Data Limit. You should also be able to turn off your mobile data altogether (very handy for saving battery power when you're not actively using mobile data). Provided, of course, your OEM hasn't disabled these functionalities. It's worth checking your settings.

Commenter

Miss E

Location

Melbourne

Date and time

September 26, 2012, 12:06PM

It isn't just the bottom end of the market - I took out a big plan when I bought my original iphone 4 which included 6gb of data for $129/month.....if I buy a new iphone5 on telstra's equivalent plan then I will be paying the same amount for only 2gb of data, which I can consume far faster on the 4g network.

Commenter

Wayfarer

Date and time

September 26, 2012, 7:11AM

Of course, you're aware, that you selected a new 4G capable phone. You can't expect the costs to initially be the same.

You've no doubt had at least two years of this "bill shock" to know, that perhaps it's best to err on the side of caution.

I've a 12gb data pack. Do I use it all? No. Does it worry me? no.You have to pay to play.